Cutting IT costs…It all adds up!

10062009

In a series of posts I have been looking at the ways in which ECM can save organisations money. However, today, I thought I would look at how business can make savings with regards to IT related costs in general. By following some “general good practice” rules, your organisation can make savings each month, which over time all adds up. Below I have compiled a list of points and questions you should think about, these will help you save money!

1. That energy bill

Let’s face it, energy bills are a large expense of running any organisation. IT makes up a large portion of your energy bill, and as such, good IT energy-saving practices can drastically reduce this cost. So here are some pointers on how to reduce that energy bill:

Consolidate your servers wherever possible. If Virtual machines are an option, take advantage of the energy and space savings these can bring

Ensure your staff don’t leave work stations on for no reason

If staff aren’t using the monitor, have them turn it off, rather than leaving it on with a screen saver running

Take advantage of power setting options in your Windows operating system

Turn off lights in your server room, these only need to be on when someone is in there working

Cut down on the number of work stations available. There is no point in having work stations available and switched on, if no user needs them. Allowing “hot desking” often helps here

Allow some users to work from home

Remember stand-by is not energy saving. If you don’t need something on (PC, Monitor, projector etc) then turn it off completely

By following these 10 guides your organisation will notice reductions in that energy bill almost immediately. In addition, think of the reduction in your organisations carbon footprint, an added benefit when saving money!

2. Does our staff need all this technology?

Often staff request and enjoy using all the latest gadgets and technology. A fine example is Blackberry phones etc. But, before you issue these, does this staff member really need this technology? Is there a real benefit of investing in this gadget? The same can be applied to work stations, often over-specified for the users’ requirements and therefore more expensive than needs be.

3. Mobile perks?

Many employees today enjoy mobile phone contracts with your organisation paying for x minutes to the network provider. This is understandable, and keeping connected for many business users is very important. However, 1 in 4 members of staff only use 75% of their minutes.

It is very hard to put together mobile phone policies for organisations, however its best to continually review your requirements for each individual, probably on a ¼ per ¼ basis. My own company does not provide mobile phones, opting to pay for any calls / a proportion of the bill based on the amount of time is used on company business. This drastically reduces mobile overheads.

4. Can an employee work from home?

By allowing employees to work from home (not necessarily everyday) your organisations saves money on office supplies, electricity, heating, air conditioning and even space. This means do you really need to be paying for such a large office environment? Could you down size?

The benefits are also there for the employee. For those who commute, the added stress of this commute is negated, which can only be a good thing for productivity. There is also the reduction in your employee’s carbon footprint relating to them commuting to the office. Finally, employees working from home can be more productive on intense tasks as they are less likely to be disturbed.

Corporations are often scared of this because of two main reasons:

Are their employees actually working, or are they doing the house work?

IT Security. Are we secure if people can work remotely?

Well the first concern will always be there. However, if you judge your employees on what they deliver, this can be quickly established if they are able to perform while working from home. The second option is not a concern. Modern network security and configuration ensures your systems are secure.

My own company strongly supports individuals working from home and collaborating over the internet when required. This means that our registered offices are kept to a minimum size and are only used when required. We have found that productivity of staff is actually increased, mainly due to increased working hours and a reduction in commuting stress and time. Working remotely also has drastic impacts on our energy bills…

5. Outsourcing

Outsourcing certain IT tasks / jobs can save vast amounts of money. However, it can also cost you vast amounts of money. It is therefore imperative that you review exactly the costs and savings that can be made by outsourcing your IT for each particular area and job. There isn’t a golden rule here, and you must look at your own organisation to get a real feel for this.

Do not hire full time staff to carry out tasks that do not equate to in hours, to a full time job. Look at contractors or organisations that can provide you with skilled individuals on an ad-hoc basis.

Certain tasks do lend themselves to using outsourced IT skills, but these do vary from company to company and the size of your company. For many small to medium sized businesses, great savings can be made by utilising an IT organisation to provide your IT support and maintenance. However, larger organisations are often aware of security issues and prefer maintain some of their own personnel who will be in charge of IT strategic decisions and security. This is fine; however, for lower skilled areas / where security isn’t such an issue, contractors and outsourced services can still provide great savings.

Consultants often have a high initial investment attached to them; however, good consultants will provide you with new ways of looking at business processes and use of IT. Check the credentials of your consultants and ensure you obtain a daily rate and fixed number of day’s quotation (if possible). Also be clear what you expect them to deliver at the end of their project. This helps you maximise the potential return on this investment, something which can be hard to measure initially.

6. Failing to test upgrades

When upgrades to systems are available, ensure they work on your current architecture and ensure they won’t harm other applications etc. This is imperative. Many man hours and money has been lost by organisations that roll out changes without testing them properly. This means added work is generated repairing and then testing correctly the upgrades. This can not only have an impact on your IT staff, but obviously on the actual business processes your IT is there to run and support.

7. Upgrading technology for no reason

Sometimes machines are upgraded for no good reason. What is the point of paying for additional hardware upgrades when there is no benefit to the users or to the business?

Though many organisations choose to upgrade their hardware and software on a “routine basis”, this isn’t always the most cost effective method. For example, organisations choose to upgrade their hardware every X years. If in a “leasing” scheme, this ensures fixed costs monthly, however, many organisations purchase their own hardware. For these companies it is far more cost effective to ensure that upgrades are only carried out when required (however, please don’t take that as advice to wait until hardware is ready for the scrap heap).

8. Failing to upgrade hardware and software

This is really the flip side to point 7. If you fail to upgrade your technology or software, you will hinder the way in which your business can perform. There is no benefit in maintaining hardware that breaks down, is now far too slow to keep up with your software or causes security issues. It simply stops your staff getting their work done, and reduces productivity and ultimately, has a negative impact on your efficiency and profitability. In addition, modern machines are much more energy efficient, again providing savings to your general IT costs.

9. Hardware branding and costs

Ok, so you like the look of brand X, and you want to move all your machines to that brand. However, is that brand the best value for money? Does it really offer you better long term stability? Energy efficiency etc. All too often, organisations are tempted to commit to a certain brand for their hardware, without looking at the competition.

Also, do you really need that super-wizz-bang printer? Or could a simply Laser jet do the same job for you? Again, too many organisations over specify their actual hardware requirements, which mean they overspend.

10. The cloud for storage and software?

The buzz word of the moment, the cloud…Can cloud computing save your organisation money? Well this is a strong debate, for me, larger organisations don’t have much savings to make from utilising the Cloud for hardware, storage and software. However, small organisations may well find savings to be made by utilising cloud based hardware and services. Ensure you check this out in great depth, there are far too many claims made about cloud computing saving money when once you look under the skin, will more than likely save you no money or in reality, cost you more.

11. Keep a lid on the training budget

Some software you purchase will require large amounts of investment in training. However, there are always efficient ways in which to train staff. Do your employees really need to travel great distances to attend training days? Do you need to send staff members off to a particular conference? It is always worth considering peer to peer training where only a limited number of people are trained and they share this training knowledge with the rest of your staff.

There are also great arguments for on-line training facilities and DVD based training options. Both of which can prove to be effective and very cost efficient.

12. Company expenses….

In light of MPs expenses, this may already be in your mind. In my own experience, travelling or working away can often mean for some, a “jolly on expenses” outing. While I don’t want to appear like a scrooge here, such activities and mentality can cost your organisation vast amounts of money over time.

If you have more than one employee travelling to the same destination etc on company expenses, ensure they travel together and take the most cost efficient form of travel. Again, not only does this save money, it also reduces your organisations carbon footprint.

Ensure you have strict and clear expense policies. This includes food, drink, hotels, phones etc. etc.. And don’t be flexible with these policies (word soon gets around if someone has got away with something they shouldn’t have).